BILL NUMBER: SB 485	CHAPTERED  07/06/99

	CHAPTER   61
	FILED WITH SECRETARY OF STATE   JULY 6, 1999
	APPROVED BY GOVERNOR   JULY 6, 1999
	PASSED THE ASSEMBLY   JUNE 21, 1999
	PASSED THE SENATE   APRIL 26, 1999
	AMENDED IN SENATE   APRIL 7, 1999

INTRODUCED BY   Senator Rainey

                        FEBRUARY 18, 1999

   An act to amend Sections 7078, 91503, 91520, 91533, and 91560 of
the Government Code, relating to the California Industrial
Development Financing Act.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 485, Rainey.  California Industrial Development Financing Act.
   (1) The California Industrial Development Financing Act provides
cities and counties with the authority to pass ordinances, and
redevelopment agencies with the authority to pass resolutions,
establishing industrial development authorities that are empowered to
issue industrial development revenue bonds under terms and
conditions specified in the act.
   This bill would provide a public agency with the power to transact
any business or exercise any powers of an industrial development
authority under the act without having to establish an authority and
would provide that references in the act to authority and board shall
mean public agency and governing body, respectively.
   (2) The act provides that property acquired pursuant to certain of
its provisions shall be suitable for, or shall evidence an
obligation respecting, certain uses and activities.
   This bill would add commercial uses in an enterprise zone or
commercial activities in an empowerment zone and enterprise community
to that list of authorized uses and activities.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 7078 of the Government Code, as added by
Chapter 955 of the Statutes of 1996, is amended to read:
   7078.  The limitations in Section 91503 on the allowable uses of
proceeds of bonds issued pursuant to Title 10 (commencing with
Section 91500) shall not apply to bonds issued on behalf of any
enterprise zone or any portion of that zone.
  SEC. 2.  Section 91503 of the Government Code is amended to read:
   91503.  The property acquired pursuant to this article shall be
suitable for, or shall evidence an obligation respecting, certain
activities or uses.  The activities or uses shall include one or more
of the activities or uses described in subdivision (a) and, unless
incidental to those activities or uses, shall not include any of the
activities described in, and not excepted from, subdivision (b).
   (a) (1) Industrial uses including, without limitation, assembling,
fabricating, manufacturing, processing, or warehousing activities
with respect to any products of agriculture, forestry, mining, or
manufacture, if these activities have demonstrated job creation or
retention potential.
   (2) Energy development, production, collection, or conversion from
one form of energy to another.
   (3) Research and development activities relating to commerce or
industry, including, without limitation, professional,
administrative, and scientific office and laboratory activities or
uses.
   (4) Commercial uses located within an enterprise zone designated
pursuant to Chapter 12.8 (commencing with Section 7070) of Division 7
of Title 1 or commercial activities within an empowerment zone and
enterprise community designated pursuant to Section 1391 of the
Internal Revenue Code of 1986, in effect on January 1, 1998.
   (5) Processing or manufacturing recycled or reused products and
materials by manufacturing facilities.
   (b) (1) Residential real property for family unit or other housing
activities.
   (2) Airport, dock, wharf, or mass commuting activities, or storage
or training activities related to any thereof.
   (3) Sewage or solid waste disposal activities or electric energy
or gas furnishing activities, unless the property acquired is
suitable for one or more of the activities described in paragraph (2)
of subdivision (a) and is not described in Section 142(f) of the
Internal Revenue Code of 1986, as amended.
   (4) Water furnishing activities.
   (5) Any activities of persons qualifying as exempt persons under
Section 501 of the Internal Revenue Code of 1986, as amended,
undertaken by those persons, other than activities constituting an
unrelated trade or business as described in Section 513 of that code.

  SEC. 3.  Section 91520 of the Government Code is amended to read:
   91520.  (a) There is in each public agency a public, corporate
instrumentality of the State of California, known as the industrial
development authority of the public agency.  Each public agency is
authorized to utilize that authority in the issuance of revenue bonds
in the accomplishment of the public purposes as provided in Section
91502.  The purposes provided in Section 91502 shall be deemed to
constitute public purposes of the public agency, and the exercise by
each authority of the powers conferred by this title, including the
power to issue revenue bonds, shall be deemed to be the performance
of an essential governmental function of the public agency; provided,
however, that exercise of the powers conferred by this title in the
achievement of the purposes provided in Section 91502 shall be
subject to the provisions of, and exclusively as provided in, this
article.
   (b) An authority shall not transact any business or exercise any
powers under this article unless, by ordinance, or, in the case of a
redevelopment agency, by resolution, the governing body declares that
there is a need for the authority and that the authority shall
function.  The ordinance shall be subject to referendum in the manner
prescribed by law for ordinances of the public agency.  With respect
to a redevelopment agency, the resolution provided for herein shall
be subject to referendum in the manner prescribed by law for
ordinances of the community in which the agency is located.
   (c) An authority shall conclusively be deemed to have been
established and authorized to transact business and exercise its
powers upon proof of the adoption of such an ordinance or resolution.

   (d) Notwithstanding any other provision contained in this article,
a public agency shall have the power to transact any business or
exercise any powers of an authority conferred by this title without
having to establish an authority.  However, a public agency may, at
its option, establish an authority pursuant to the provisions of this
article to exercise any powers conferred by this article.  In the
event that a public agency acts as an industrial development
authority, any reference to authority and board contained in this
title shall mean public agency and governing body, respectively.
  SEC. 4.  Section 91533 of the Government Code is amended to read:
   91533.  Authorities shall undertake projects by entry into project
agreements in substance not inconsistent with the following:
   (a) The company shall comply with (or cause to be complied with)
all legal requirements relating to the project and the operation,
repair, and maintenance of the facilities, including (1) obtaining
any rezonings or variances, building, development, and other permits
and approvals, and licenses and other entitlements for use, without
regard to any exemption for public projects; and (2) securing the
issuance of any certificates of need, convenience, and necessity or
other certificates or franchises; and shall provide satisfactory
evidence of compliance.
   (b) The company shall comply with all conditions imposed by the
public agency in its approval of the project pursuant to subdivision
(f) of Section 91530.
   (c) The company shall provide, or cause to be provided by others,
all amounts required for the project and all property relating to the
project that are not to be provided as or by expenditure of bond
proceeds, and in the case of any amounts and property that the
company proposes to cause to be provided by others, as by contract,
grant, subsidy, loan, or other form of assistance, shall provide
satisfactory evidence that those amounts and property will be
provided when required.
   (d) Expenditure of bond proceeds shall be supervised to assure
proper application to the project.
   (e) The company shall at its own expense insure, repair, and
maintain the facilities, pay taxes with respect to its interests in
the property relating to the project as Division 1 (commencing with
Section 101) of the Revenue and Taxation Code requires, and pay
assessments and other public charges secured by liens, upon those
interests as constitute the tax base for property taxation on the
same basis as other property, or shall cause the same to be provided
by others to the satisfaction of the authority.
   (f) The amounts payable under the project agreements to or for the
benefit of an authority shall in the aggregate not be less than
amounts sufficient (1) to pay any bonds that shall be issued by the
authority to pay the cost of the project, (2) to maintain any
required reserves, (3) to make payments as may be required into any
sinking fund or other similar fund, and (4) to pay those
administration expenses that relate to the administration of the
project agreements, the indenture, and the bonds.
   (g) The term shall extend at least until the date on which all
those bonds and all other obligations incurred by an authority in
connection with a project shall have been paid in full or adequate
funds for that payment shall have been otherwise provided.
   (h) Such additional provisions as in the determination of the
board are necessary or appropriate to effectuate the purposes of this
article, including provisions for the following:
   (1) For payments under the project agreements that include amounts
for administration expenses in addition to the amounts that the
agreement is required to obligate the company or others to pay.
   (2) For payment before a facility exists or becomes functional, or
after a facility has ceased to exist or be functional to any extent
and from any cause.
   (3) For payment whether or not the company is in possession or is
entitled to be in possession of the facilities or for payment in the
event of sale or other transfer of ownership of or the encumbering of
the facilities.
   (4) Relating to the carrying out and completion of the project,
including the allocation of responsibility between the authority and
the company regarding the acquisition of property, the making of
other purchases, the contracting for construction of the facilities,
with or without competitive bidding, and the payment therefor and the
designation of particular deposits or investments otherwise
authorized for the deposit, investment, and reinvestment of revenues.

   (5) That some or all of the obligations of a company shall be
unconditional and shall be binding and enforceable in all
circumstances whatsoever notwithstanding any other provision of law.

   (6) Relating to the use, maintenance, repair, insurance, and
replacement of property relating to the project, such as the
authority and the company deem necessary for the protection of
themselves or others, including, but not limited to, liability
insurance, and indemnification in the event of default.
   (7) Defining events of default and providing remedies therefor,
which may include an acceleration of future payments thereunder.
   (i) The company shall provide for the payment of relocation
assistance as provided by Chapter 16 (commencing with Section 7260)
of Division 7 of Title 1, and shall reimburse the authority or the
public agency, as the case may be, for relocation assistance
services, and notwithstanding any other provision of this title, the
authority shall determine that those services are provided and that
relocation assistance payments are made.
   (j) Notwithstanding any other provision of this title, projects
undertaken and carried out pursuant to this title shall be consistent
with the requirements of the general plan as contained in Article 5
(commencing with Section 65300) of Chapter 3 of Title 7 at the time
of entry into the project agreement, or in the event inconsistent at
that time, then at the time of delivery of any bonds.
   (k) The company may, pursuant to project agreements, provide or
cause to be provided other security, such as, but not limited to, an
agreement of guaranty, either of itself or another person, or other
consideration directly to the bondholders, their agent or the trustee
under an indenture, and neither the company nor any such other
person, shall be precluded by the project agreements from having
other contractual relationships with those bondholders, agent or
trustee.
   (l) Authorities shall require, whether or not authorities,
companies, or others are the contract awarding bodies, that on any
construction, improvement, reconstruction, or rehabilitation financed
in whole or in part by means of bonds issued pursuant to this title,
the resolution of intention for which is adopted on or after January
1, 1983, all workers employed in that work, exclusive of maintenance
work, shall be paid not less than the general prevailing rate of per
diem wages for work of a similar character in the locality in which
the work is performed, and not less than the general prevailing rate
of per diem wages for holiday and overtime work.  Those rates shall
be determined by the Director of the Department of Industrial
Relations in accordance with the standards set forth in Section 1773
of the Labor Code.  The director's determination shall be final, and
Sections 1773.1, 1773.5, 1774 and 1776 (excepting subdivision (f)) of
the Labor Code shall apply.
  SEC. 5.  Section 91560 of the Government Code is amended to read:
   91560.  (a) The Legislature finds and declares that small
businesses may have difficulty establishing adequate security for
bonds issued by an authority in their behalf; that establishing
common reserve funds will help to provide reasonable security for
these bonds and will help to make the authority's services available
to various small businesses that may be otherwise unable to use them.

   (b) For the purpose of establishing and maintaining the common
reserve funds it deems necessary or desirable to secure its bonds or
any issuance thereof, the commission pursuant to this section or an
authority, pursuant to its project agreements with companies, may
levy fees or other charges on, or require deposits from, companies
receiving financing for projects under this title.  Prior to levying
any of these fees or charges or requiring deposits, the commission or
an authority shall adopt regulations for the operation of the common
reserve funds and governing the amounts and any payment schedule for
the fees, charges, or deposits.
   (c) Subject to any prior contractual obligations to any of its
bondholders, the commission or an authority may establish one or more
common reserve funds for any or all of its bonds.  The commission
shall establish its own liability limits of the common reserve fund
with respect to any single issue of bonds issued by the commission,
and each authority shall establish its liability limits of the common
reserve fund with respect to any single issue of bonds issued by the
authority subject to the approval of the commission.
   (d) Each common reserve fund established pursuant to this section
shall be deposited in a special account that shall be established by
the Controller. Notwithstanding any other provision of law, all
interest or other increment earned by investment or deposit of moneys
in such an account pursuant to any provision of Part 2 (commencing
with Section 16300) of Division 4 of Title 2 or pursuant to any other
provision of law shall be credited to, and deposited in, the
account.
